India's business activity slows in September, HSBC survey

India's business activity expanded at a slower pace in September, with the HSBC Flash India Composite Output Index dropping to 59.3 from 60.7 in August, according to preliminary results of a private survey.This marks the first time in nine months that the index has fallen below 60, although it remains above its historical average, indicating continued expansion in the economy, noted analysts.
The report highlights a cooling off in both the manufacturing and services sectors, which have been the primary drivers of India’s economic momentum this year. "The flash composite PMI in India rose at a slightly slower pace in September, marking the slowest growth observed in 2024,Pranjul Bhandari, chief India economist at HSBC, reportedly stated. Both the manufacturing and service sectors exhibited similar trends during the month."
Manufacturing output slowed to 56.7 in September from 57.5 a month earlier, while services activity eased to 58.9, down from 60.9 in August. Despite this slowdown, both sectors remain in expansion territory, continuing their steady growth trajectory seen throughout the fiscal year.Earlier this year, manufacturing registered a 7% growth in the first quarter of FY25, compared to 5% in the previous year. Services, which have been particularly resilient, posted a four-quarter high growth rate of 7.3%, up from 6.7% in the previous quarter, according to information.While the latest data suggests a moderation in growth, economists believe India's overall economic fundamentals remain strong, with the slowdown likely representing a temporary adjustmen.

(Writer is a Finance Research Analyst, based in Gandhinagar, Gujarat)